The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1887-09-30
BANKS, soNDs AND MONEY.
The Foundation lof the Nat,ona,
Banking system Disappearing.
Secretary FaIrchIId Studies With
Bankers to make Money Easier.
The President Called on to Give
oracular Wisdom.

Bankers to MAKE money Easier.
The President Called on to Give
oracular Wisdom.
PHILADELPHIA, Sept. ga Washington
special to the Ledger says that Treasury Of
ficials express surprise at the fact that dur-
ing the past few days the national banks
have withdrawn ae9nsiderable amount of
per cent. bonds and surrendered cores
ponding amount of their circulating notes.
While the Treasury was engaged in calling
per cent. bonds for redemption, national
bank officers and others interested in the
maintenance of the national bank system
complained that the rapid redemption Of
bonds was calculated to interfere with the
demands of business by forced contraction
of the circulating medium, and also to
shorten the existence of the present national
bank system. The action of the Treasury
In calling per cent bonds for redemption
forced the banks to withdraw that class of
securities he'd against their circulating
notes, and. therefore surprise is expressed
that the banks have voluntarily begun to
surrender per cent. bonds that have still
twenty years to run. The withdrawal of
these long time bonds at this time may have
no special significance, vet it has directed
attention to the fact that with the ANIMAL
requirements for the sinking fund the basis
of the national banking system Is threatened
with early extinction, and by the action of
the banks themselves. The four and one-half
bonds, OF which $240, 900 are outstand-
ing and of which amount the banks have
on deposit with the treasurer to secure cir
culation SIC, 00O00 become payable Sept. /,
1891. During the intervening four years the
sinking fund will require at least S20O000-
900. The amount must be purchased unless
the sinking fund law should be repealed or
modified, and should the present ratio of
excess OF receipts over expenditures be con-
tinued, the Treasury win be required to
purchase double the amount of bonds named
IN order TO dlsburSe the surplus and return
the money to business channels, The total
amount of interest-bearing bonds Outstand-
ing is about $970,000,000. Under existing
laws and conditions the Treasury in the
next i've years would absorb the
larger portion of that sum and practically
terminate the present national bank
ing system. The bonds held by the Treasury
to secure bank circulation are steadily de-
creasing, the amount now held being $751;
100000. which represents about S207, 600, 900
OF national bank circulating notes. Should
the banks continue the surrender of interest
bearing bonds this amount will be corre-
spondingly reduced, and, in any event, there
Is likely to be large reduction during the
nye years next ensuing. These facts are
being seriously considered by the President,
Secretary Fairchild and Comptroller Of the
Currency Trenholm, and will be discussed
by each in his forthcoming report to Com
gress. The absorption by the Treasury of
interest bearing bonds and the CONSEQUENT
curtailment and ultimate extinction of the
national banking system suggests highly
Important and serious problem for the solu-
ton OF Congress, and the President Is Of the
opinion that that body should enter upon
It's consideration at the earliest practicable
day. The question for Congress to decide is
whether any system of banking shall sue
ceed the present system, or whether the
government shall issue circulating notes in
lieu OF the bank notes that are soon to pass
away by the redemption of bonds. In this
question Is involved the basis and character
OF the paper to be issued by the government,
and in this silver will figure as an important
and perhaps annoying factor. There are
now nov In eifcaiatlon nearly l52 millions In sill
standard silver dollars. When Congress
comes to consider the question of replacing
national bank notes with issues from the
Treasury there will doubtless be found many
adVocates OF an issue OF certificates based
on silver.
Money to be Made Easy; II It Can Be.
New YORK, Sept. 29.-Secretary Fairchild
had long conference with leading bankers
last evening. The surplus, the dangers con-
nected with its increase in size, and the rem
edies in the power of the secretary to apply,
were talked over. On the street the news
that these gentlemen were meeting Secretary
Fairchild produced big effect.
The street knew that the conference had
plenty of subjects to discuss; the condition
OF the money market, the best means to keep
it in healthy condition, the surplus and the
best way to use it to promote the interests
OF the community, the probability of S14,-
100000 OF bonds being absorbed by the treas
ury, and the authority of the secretary to go
outside the sinking fund to give any further
reilef that may be required. All Of these
matters were talked about, but 1t was the
last that received the great bulk of the atten-
tion. 10 get light upon it was the real OBJ
lect OF the conference, and as far as the great
majority OF the New Workers were con-
cerned, 1t was agreed that section of the
federal laws gave the secretary the power
explicitly.
It was generally understood that Mr. Fair
child went into the conference with very
grave doubts upon the point in question. and
conviction that he would have to apply to
Attorney General Garland for an opinion
before he could go outside the sinking fund,
In case money fewed into the treasury too
rapidly before Congress assembled, and took
up the responsibility of the financial ques-
tion. Perhaps he still has his doubts, but
the authorities he consulted were likely to
weaken them.
There is a general belief that the various
calls have absorbed most of the floating
ponds. Ex-Ireasurer Jordan holds that the
secretary has the right to 60 outside Of the
sinking fund, basing his opinion upon the
law OF March 3, 1881.
The course Of the Secretary was general
" upheld, said President Cannon. Of the
Onase National Bank. From what was
said this afternoon, the discussion has led
me to believe that he will not allow any con-
siderable surplus to accumulate"
PRESIDENT Tappin, of the Gallatin National
Bank, said that to the majority this right
was plain, and the case was exactly covered
The conference, in the view Of President
Baldwin, of the Fourth National Bank,
showed that everybody present approved Of
what had been done by the President and
the secretary OF the Treasury, and that
policy would be continued.
While extra sinking fund purchases were
the most considered, the talk also drifted at
times to the project that the banks should be
much larger scale than at present. But this
was soon dropped, because only the excise
revenue could he given to the banks, the re-
ceipts from customs duties going directly to
the sub-treasurynL Besides, the institutions
to which the funds of the government would
be intrusted would have to give security to q
very large amount, and the result would be
that the practical assistance to the country
at large would be comparatively small. SO
thought the majority, but there was minor
ity with great hopes for the usefulness of
the banks as repositories for the nations
surplus wealth.
WASHINGTON, Sept. 29.-Secretary Fair
child is closeted with the President today on
the question of the right to purchase ponds.
The only question not determined is as to
the right to pay premium for bonds bought
outside the sinking fund.